Polish firms fight back in merging market

According to experts at KPMG, the Polish M&A market has been developing dynamically over the past three years and in 2006 its value could reach $20 million.

"Before, Polish companies were taken over by strategic investors. Now, we can observe more and more takeovers among big Polish players. Also, more and more often Polish companies take over foreign entities," says Krzysztof Rozen, managing partner at KPMG.

Rozen also stressed that there is a strong correlation between GDP growth and developments on the M&A market.

"The Polish M&A market is driven by three main factors. The first one is fast economic growth, the second one is cultural and economic integration with the EU - Polish companies have realized bigger entities can compete more successfully on the EU market - and the third factor, often underestimated, is the change in attitude of Polish managers towards M&A," he adds.

While on the European level, the energy sector is expected to witness the most mergers and acquisitions, Rozen believes that in Poland there is no dominant branch. However, in 2006, Poland's all-time biggest foreign investment by PKN Orlen in Mazeikiu Nafta by far prevailed over other transactions.

The biggest acquisitions announced in H1 2006 include Orlen's purchase of the Lithuanian oil refinery for zł.2.5 billion, followed by KGHM, PKN Orlen, PSE and Węglokoks taking over Polkomtel, TVN buying Grupa Onet, GE Capital Real Estate acquiring Geant Hypermarket Operations and Softbank merging with Asseco Poland.